Potential Strategic Issue

Executive Summary

42 Below is a company that has been founded in New Zealand and is a large competitor in the global vodka market. 42 Below was bought by Bicardi Ltd and retains its original founder Geoff Ross as its CEO(Walker, 2010).

This report identifies the strategic issue 42 Below may be facing. Brand awareness of the company plays a large part of the strategic issue as it relies heavily on strategic marketing tools that are potentially damaging to the company if taken out of proportion by the customers. This issue determines the problem 42 Below is facing. Options for this problem are porter's five forces and the stage the product is currently at in the life cycle of a product.

42 Below is analysed through the potential internal strengths and weaknesses and the potential external opportunities and threats.

It is recommended that 42 Below implements the life cycle model for their product.

Introduction

This report is to identify the strategic issue that 42 Below may have occurring in their company. This problem can be defined as large risks being the potential for loss in sales and profit.

Problem Definition

Brand awareness pays a large part of the marketing of 42 Below. The company 42 Below seems to rely heavily on the clean 'green' image of New Zealand when promoting their product internationally and nationally. This can create problems if the 'green' image of New Zealand is damaged and the public reflects badly on 42 Below. This could mean loss of sales and loss profit.

42 Below also uses viral marketing which can be potentially damaging when used without a plan of action and can spiral out of control if not controlled well by the company.

Options

42 Below could use Porter's five forces as a way to attempt to understand their niche market. First the contemplation of the risk of new entry by potential competitors and who these potentially competitors are and what kind of marketing strategy they would use that 42 Below could implement instead. Second does the bargaining powers reside with 42 Below's buyers. Third how much power do their suppliers have over 42 Below? Lastly the extent of rivalry there is among the established companies within 42 Below's industry(Walker, 2010).

42 Below could also use the Life Cycle Model to determine where in the model their product is positioned and then what strategic marketing tools should they implement. These stages could be an embryonic industry environment where the product is fairly new. It could be a growth industry environment where the product is growing and expanding. It may be in a mature industry environment where the product is at peak and is holding a steady growth and return on profit. It could also be in a declining industry environment where 42 Below's product may be in the decline stage and is decreasing in production and profit. This life cycle is a prediction that cannot always be entirely accurate(Walker, 2010).